Ethnic violence in China's restive Xinjiang province has left more than 140 people dead and hundreds injured, Chinese authorities said today, the bloodiest violence in the country since the Tiananmen Square protests.

Clashes broke out between Muslim Uighurs and Han Chinese in Urumqi, the western region's capital, last night. Officials said 828 people were injured and hundreds had been arrested.

Today, thousands of armed paramilitary and riot police were blocking off the area where the violence began. Burned-out buildings were still smouldering and shop windows had been smashed.

One Han shopkeeper said: "Last night was very dangerous. We feel safer now because there are so many police."

The official Xinhua news agency said 140 people died and the death toll was still climbing. It is still not clear how the majority of the victims were killed. There were reports of Uighur rioters attacking Han Chinese people and of violent clashes between riot police and the protesters.

One hospital reported that most of the casualties it had received were Han Chinese, but there were a significant number of Uighur casualties.

The protests were said to have started when several thousand people rallied in the grand bazaar to protest at the death of two Uighur migrants, and injuries suffered by hundreds of others, during an ethnic conflict between workers in a factory in Guangdong, southern China, last month.

Muslim Uighurs are the indigenous ethnic majority of Xinjiang. The region has seen an influx of Han Chinese seeking to profit from its oil and gas resources, which has stirred up resentment.

On an official tour of the damaged area around the city's grand bazaar, hundreds of damaged vehicles, including a fire engine, could be seen while Uighur residents shopped in the market.

A car dealer, Guo Jianxing, said a large crowd of Uighur men had arrived at his showroom last night and caused damage worth hundreds of thousands of yuan, as well as injuring one of his workers. Blackened vehicles, one upside down, filled the forecourt and the showroom windows had either been smashed or had broken in the heat of the blaze that consumed the building.

Protesters smashed up buses, threw stones and assaulted passersby, according to another witness. Armed riot police moved in to restore order with teargas, armoured vehicles and road blocks, according to a foreign student in Xinjiang. Mobile phone networks appeared to be working only sporadically.

Shaky amateur video posted on the internet shows large crowds blocking several of the main streets in the city as people watch from rooftops. Other videos have been removed by internet censors.

"I saw a Uighur man kicking a Han or Hui woman," said a student who wished to remain anonymous. "In the hospital, I saw a Han man arrive with lots of blood over his shirt, but the Uighur staff paid him no attention."

"My family didn't dare go out," said Yang Yu, a Beijing-based journalist, whose family live in Urumqi. "They live on the 14th floor but they could still hear the people shouting and the emergency vehicles."

Watching as her assistant salvaged blackened goods from what remained of her shop, Liu Jie said the demonstrators came five times yesterday, starting at around 6pm.

"It was getting worse by 7pm and I told my workers to go home. When people broke the windows I fled myself. They were using big rocks.

"They beat and killed Han people in the street. I was hiding in the courtyard behind the shop and they tried to break the gate, then the second group came. We were attacked five times, the last time at about 11pm and they set [the shop] on fire. We hid in the backyard until the armed police and fire service came to help. There were people killed on the street, they were chased, beaten and knifed. Physically I was not hurt but mentally I was seriously attacked." She added: "I heard they were aroused by events in Guangdong."

Along the road from her store, smoke was still pouring from the charred remains of buses. Blood had seeped into the road and odd shoes lay scattered in the street.

At People Hospital, doctors were still treating hundreds of victims from last night's violence. The hospital head doctor said 274 patients were still in the hospital, the vast majority of whom were Han. Another 39 were Uighur, 15 were Hui Muslim and four came from other minority groups.

The casualties included a four-year-old boy who was holding his pregnant mother's hand when she was shot. She was undergoing surgery, while the boy was left on a bed in a hospital corridor, his head bandaged, waiting for her.

In the intensive care unit, doctor Ge Xiaohu said: "We have never had a situation like this. It is terrible."